Since its emergence in Canada in the early 1990s, the payday loan industry has grown rapidly. Although these loans allow for quick cash, it is possible that the amount to be reimbursed is higher than expected.
The new regulations will provide more protection so that you have all the information required to make decisions with respect to a short term loan. This will allow you to be able better know what it will cost you before you sign a credit agreement.
What is a payday loan?
A payday loan is an unsecured loan to a relatively modest amount granted to a borrower who guarantees reimbursement by a post-dated cheque or direct debit authorisation. Lenders usually require borrowers to provide proof that they have continuous employment for three months and that they hold an active personal cheque account and produce a utility bill on which contained their name in order to corroborate their address. No credit check is performed.
In Canada, the amount of the loans usually does not exceed 50 per cent of the net salary of the borrower. The average loan to the country is $ 300 with a maturity ranging from ten days to two weeks.